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Flashcards for vocabulary review.

Business objectives

Measurable targets set by the business such as sales or profits that have to be achieved in a given time period.

Primary sector

The first stage of production and includes extracting or growing resources.

Secondary sector

Businesses involved in manufacturing or processing raw materials into finished products.

Tertiary sector

Businesses that provide services to consumers and other businesses.

Entrepreneurs

Individuals who take risk to create or start new business or project.

Enterprise

Skill needed to make a new idea work.

Factors of production

Economic resources that business enterprises use to produce goods and services, including land, labor, capital, and enterprise.

Public sector

Comprises businesses owned and controlled by the government or local authorities.

Private sector

Comprises businesses owned and controlled by individuals or groups of individuals.

Sole Trader/Sole Proprietorship

A business organization owned and controlled by one person, who can employ workers but is the only one who invests in and owns the business.

Partnership

A business formed by two or more people to carry on a business together, with shared capital investment and, usually, shared responsibilities.

Private limited company (Ltd)

A company where shares can only be sold to people known by existing shareholders (family and friends).

Public limited company (PLC)

A company with two or more owners who can sell shares to any individual/organization in the general public through stock exchanges.

Unlimited liability

An individual or group of individuals personally responsible for all the actions of their businesses.

Limited liability

Investors can lose the money they have invested into the business but their personal possessions are safe.

Company

A business organization which has its own legal identity and limited liability.

Shareholder

An investor in and one of the owners of a company.

Dividends

Money that is paid out of profits to the shareholders, a reward to the owners of the business.

Holding companies

A business organization that owns and controls a number of separate businesses, but does not unite them into one unified company.

Public corporations

Business enterprise owned and controlled by the state, often not having profit as a main objective.

Free-market economy

Economic resources are owned largely by the private sector with little state intervention.

Mixed economy

Economic resources are owned and controlled by both private and public sectors.

Command economy

Economic resources are owned, planned and controlled by the state.

Objective

A target that is measurable and has a given timescale.

Strategy

The long-term plan to achieve the objective of a business.

Tactics

The short-term actions needed to implement the strategy.

Budget

A financial plan.

Ethical behaviour

Behaviour that is thought to be morally correct, and not necessarily the most profitable.

Ethical code (code of conduct)

A document detailing a company's rules and guidelines on staff behaviour that must be followed by all employees.

Stakeholders

Groups or individuals who have an interest in a business.

Accountability

The extent to which the individual or a group is held responsible for a decision or a policy.

Social responsibility

A philosophy under which businesses consider the interests of all groups in society as a central part of their decision making.

Social auditing

A system of reviewing a company's operations to examine its social impacts and to compare social performance with any social objectives the organisation might have.

Authority

The power or ability to carry through a task or action.

Leadership

The function of ruling, guiding and inspiring other people within an organization in pursuit of agreed objectives.

Management

Planning, organizing, directing and controlling all or part of a business enterprise.

Delegation

Passing authority down the organizational hierarchy. This is only genuine if the manager relinquishes some control to the subordinate.

Business culture

The attitudes, values and beliefs that normally exist within an organization.

Communication

The exchange of information or ideas between two or more parties.

Emotional intelligence

The capacity for recognizing our own feelings and those of others, for motivating ourselves, and for managing emotions well in ourselves and in our relationships.

Span of control

The number of subordinates that report directly to a manager.

Chain of command

The way authority passes down through the levels of hierarchy in a business.

Hierarchy

The different levels of authority within an organization.

Centralization

The concentration of decision-making authority in top management.

Decentralization

The delegation of decision-making authority to lower levels of management.

Autocratic leadership

A type of leadership that keeps all decision-making at the centre of the organisation.

Democratic leadership

A leadership style that promotes the active participation of workers in taking decisions.

Paternalistic leadership

A leadership style based on the approach that the manager is in a better position than the workers to know what is best for an organisation.

Laissez-faire leadership

A leadership style that leaves much of the business decision-making to the workforce, a 'hands-off' approach and the reverse of the autocratic style.

Motivation

Describes the factors that arouse, maintain and channel behaviour towards a goal.

Piece-rate pay

A system that an employee's wage is determined by the quantity of products produced.

Hygiene factors

Aspects of a worker's job that have the potential to cause dissatisfaction, such as pay, working conditions, status and over supervision by managers.

Job enrichment

Aims to use the full capabilities of workers by giving them the opportunity to do more challenging and fulfilling work.

Time rate

Payment to a worker made for each period of time worked, e.g. one hour.

Piece rate

A payment to a worker for each unit produced.

Salary

Annual income that is usually paid on a monthly basis.

Commission

A payment to a sales person for each sale made.

Bonus

A payment made in addition to the contracted wage or salary.

Performance related pay (PRP)

A bonus scheme to reward staff for above-average work performance.

Profit sharing

A bonus for staff based on the profits of the business - usually paid as a proportion of basic salary.

Fringe benefits

Benefits given, separate from pay, by an employer to some or all employees.

Job rotation

Increasing the flexibility of employees and the variety of work they do by switching from one job to another.

Intrinsic motivation

Motivation that comes from within an individual, such as job satisfaction or pride in work.

Extrinsic motivation

Motivation that comes from outside an individual, such as pay or recognition.

Job enlargement

Expanding a job horizontally by increasing the range of tasks.

Empowerment

Giving employees greater authority and responsibility for decision- making.

Human resource management (HRM)

The strategic approach to the effective management of an organisation's workers so that they help the business gain a competitive advantage.

Recruitment

The process of identifying the need for a new employee, defining the job to be filled and the type of person needed to fill it and attracting suitable candidates for the job.

Selection

Involves the series of steps by which the candidates are interviewed, tested and screened for choosing the most suitable person for vacant post.

Job description

A detailed list of the key points about the job to be filled - stating all its key tasks and responsibilities.

Person specification

A detailed list of the qualities, skills and qualifications that a successful applicant will need to have.

Contract of employment

A legal document that sets out the terms and conditions governing a worker's job.

Labour turnover

Measures the rate at which employees are leaving an organisation.

Marketing

Involves identifying, anticipating and satisfying customer needs profitably.

Market orientation

A focus on meeting customer wants and needs, as opposed to product orientation which focuses on the product itself.

Market share

The percentage of total market sales achieved by one business.

Market growth

The increase in the total sales of a product in a market over a period of time.

Market research

The collection and analysis of data relating to consumer preferences, buying habits and market trends.

Primary research

Original research collected first-hand by a business for a specific purpose.

Secondary research

Data collected by others that a business can use for its own purposes.

Quantitative research

Research that produces numerical data that can be analyzed statistically.

Qualitative research

Research that focuses on opinions, attitudes and motivations rather than numerical data.

Open questions

Questions that invite a wide-ranging or imaginative response, with results that are difficult to collate and present numerically.

Closed questions

Questions to which a limited number of pre-set answers are offered.

Marketing mix

Refers to the different elements involved in the marketing of a good or service - the 4 P's - Product, Price, Promotion and Place.

Above the line promotion

Marketing communications that use mass media channels that are paid for, such as television, radio and press.

Below the line promotion

Direct marketing communications not using mass media, such as sales promotion, direct mail, and events.

Branding

The process of creating a unique name and image for a product in the consumers' mind.

Distribution channels

The different routes that products take from producer to consumer.

E-commerce

The buying and selling of goods and services over the internet.

Customer relationship management (CRM)

Using marketing activities to establish successful customer relationships so that existing customer loyalty can be maintained.

Intangible attributes

Subjective opinions of customers about a product that cannot be measured or compared easily.

Tangible attributes

Measurable features of a product that can be easily compared with other products.

Product positioning

The consumer perception of a product or service as compared to its competitors.

Product portfolio analysis

Analyzing the range of existing products of a business to help allocate resources effectively between them.

Extension strategy

Marketing plans to extend the maturity stage of the product before a brand new one is needed.

Materials requirement planning (MRP)

A system for calculating the materials and components needed for production.

Consumer durable

Manufactured product that can be reused and is expected to have a reasonably long life, such as a car or washing machine.

Price elasticity of demand (PED)

Measure of responsiveness of demand following a change in price.

Mark up pricing

Adding a fixed mark-up for profit to the unit price of a product.